How to Perform a SWOT Analysis

SWOT Analysis, when it is performed in a practical and effective way is perhaps most of us wanted to achieve. This article illustrate the What? When and How? It can be done in a simplistic way.

WHAT IS SWOT ANALYSIS?

S.W.O.T. is an abbreviation for Strength, Weakness, Opportunities, and Threats. It is a situation analytical tool to evaluate a business environment, competitive situation of an organization or even a problem.

Why I called it a situational analysis? Because it evaluate the perception of a user on an organization's internal Strength & Weakness as well as external Opportunities & Threats based on the knowledge of t he user has with the business environment outside the organization.

WHEN TO USE SWOT ANALYSIS?

SWOT Analysis is one of the simple tool used to do a quick analysis about an organization. A full SWOT analysis is normally used as an additional tool to Strategic Planning. Otherwise, it may be used for various other situations. There are cases where the SWOT Analysis is used to determine internal capability only i.e. evaluating the Strengths and Weaknesses. Example, it may be used to plan for new product launching, increase market share, venture into new business, evaluate your own operation capability or use it to solve a problem.

HOW TO USE SWOT ANALYSIS?

Although it is quite easy to use SWOT Analysis, it is rather challenging to master it. You may use it in a team or by yourself. If you use it in a team, then you need to use the brainstorming tool to gather ideas about the four factors of SWOT from the team members. If you do it by yourself, then you are the only one who give all the ideas about the SWOT factors. Whichever approach you take, you would ask what are the Strengths, Weakness, Opportunities and Threats of an organization or situation you are in. Then list them appropriately as the example below:-

STRENGTHS

- Skillful workforce

- Strong financial

- High quality product or service

WEAKNESSES

- High turnover

- Slow in new product design

- Bureaucratic management

OPPORTUNITIES

- New market is open up (e.g. AFTA, WTO)

- Migration to new software

- Customer are more quality focus

THREATS

- Low entry barrier

- Competitors is reducing price

- Economy slow down

TIPS

1) It should be emphasized that Strength & Weakness are referred to internal factors whereas Opportunities and Threats are referred to External factors.

2) Items identified by SWOT is non factual during the initial use of the tools. As experience build up, you should verify the items with factual evidence.

3) Although conceptually these two factors are clearly identified, many of my participants use them interchangeably.